Consider a firm that sells its product in a perfectly competitive market where the current market price is $3.80 per unit and the total market quantity is 2560 units. The firms in the market have identical cost structures and the firm's cost structure

is described by the following equations: TC = 62.50 + 0.1q? - 0.2q and MC = 0.2q - 0.2.

PART A: Suppose consumers' income increases, and consumers view this good as a normal good.

As a result of this event (and with the market price being one of the following prices: $1.80, $3.80, or $5.80), what quantity should the firm produce to maximize its profit in the short run?

PART B: Suppose consumers' income increases, and consumers view this good as a normal good.

As a result of this event (and with the market price being one of the following prices: $1.80, $3.80, or $5.80), what is the firm's short run profit at its profit maximizing level of output?

PART C: Suppose consumers' income increases, and consumers view this good as a normal good.

What is the long run equilibrium price?